STATE OF NEW YORK
INSURANCE DEPARTMENT25 BEAVER STREET
NEW YORK, NEW YORK 10004

George E. Pataki
Governor

Gregory V. Serio
Superintendent

Circular Letter No. 8 (2004)
October 5, 2004

TO:

ALL MOTOR VEHICLE AUTOMOBILE
SELF-INSURERS, AND INSURERS AUTHORIZED TO WRITE MOTOR VEHICLE INSURANCE IN NEW YORK STATE
AND THE MOTOR VEHICLE ACCIDENT INDEMNIFICATION CORPORATION

RE:

REVISION TO THE NO-FAULT FEE SCHEDULES
- ADOPTION OF THE 28th AMENDMENT TO REGULATION 83

STATUTORY REFERENCE: SECTION
5108 OF THE INSURANCE LAW

The purpose of this
Circular Letter is to inform providers of No-fault benefits that the
Department has promulgated the 28th
Amendment to Regulation No. 83, effective October 6, 2004.

Background:

The prior fee schedule for durable medical equipment and supplies contained in
Regulation 83 failed to definitively establish consistent and reasonable values for the
cost of durable medical equipment and supplies, resulting in numerous disputes between
providers and insurers many of which proceeded to no-fault arbitration and the courts for
resolution. The adoption of an established fee schedule that is updated as necessary to
reflect increased costs and to include newer products as they are developed will provide
for more timely payment of health care provider charges and result in a significant
reduction in litigation costs that are being incurred due to the variable nature of the
current fee schedule rule used to establish these costs. Utilization of the established New York State Medicaid fee schedules for durable
medical equipment, medical/surgical supplies, orthopedic footwear and orthotic and
prosthetic appliances should significantly reduce the number of disputes between insurers
and health care providers, resulting in more uniform, efficient and cost effective
processing and payment of no-fault claims.

The Amendment:

Establishes a fee schedule for durable medical equipment that providers of No-fault
benefits are required to follow in reimbursing applicants for these items.

Formally codifies an opinion that the Departments Office
of General Counsel has previously expressed concerning payments
for health services under the New York No-Fault law.
In accordance with Counsels position, the Regulation provides
that health services performed by a non-physician employee of a
physician may be billed by a medical professional corporation only
at the No-fault fee schedule rate established for the licensed treating
provider who actually provides the services, not at the supervising
licensed physician rate. See General Counsel Opinions 4-24-2002 (#26) and 3-7-2003
(#26).

However, the Regulation includes an exception to this rule. If the Workers
Compensation Board fee schedule contains a ground rule permitting a licensed non-physician
employee to bill under the licensed health providers fee schedule for the services
performed by a licensed non-physician employee, then the insurer is required to pay the
bill using the fee schedule required by the Workers Compensation fee schedule ground
rule.

All insurers and self-insurers must ensure that the new
rules contained in the 28th Amendment to Regulation 83 will be applied
properly.

If you have any questions regarding the contents of this
circular letter or the 28th amendment to Regulation 83, please contact: